Investors have bought shares ahead of the Bank of England's interest rate decision due by noon today, helping the FTSE 100 index gain about 21 points to 4,490.
Also helping the market is news internet firm Yahoo, which has reported better than expected first quarter results, and is due to offer a stock split, and PC maker Dell, which upgraded its outlook.
Tesco leads the gainers with an 8p rise to 249p as some analysts say defensive stocks will do better in a rising interest rate environment.
Imperial Tobacco likewise is up 38p to 1,198p.
3i, the technology venture capitalist, is up 14p to 614p.
Marks & Spencer has dropped 6.25p to 277p after Credit Suisse First Boston lowered its recommendation on the stock ahead of results due by next week, citing a risk of disappointing sales figures.
The FTSE 250 index is up about 4 points to 6,327.
Arm is up 2p to 126p on the news from Yahoo and Dell.
Eurotunnel fell 1.75p to 37p after ratings agency Fitch said the victory by rebel shareholders at a meeting yesterday will not have any immediate impact on the poor debt rating of the company.
Shares fell in the US overnight as events in Iraq continued to weight on investor sentiments.
General Motors led the Dow Jones Industrial Index down 90.66 points as China, the world’s fastest growing car market, reported deflation hitting parts and finished car prices over the past 12 months.
The S&P 500 dropped 7.63 points to 1,140.53, while Nasdaq’s Composite dropped 9.66 points to 2,050.24.IFAonline
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